This is
a petition for review, in a Federal Railroad Safety Act
("FRSA") whistleblower retaliation action, of an
agency decision resulting in the statutory maximum award of
punitive damages against a railroad. The railroad brought
charges of dishonesty and insubordination, as well as threats
of dismissal, against an injured employee who had filed a
complaint under the FRSA with the Occupational Safety and
Health Administration ("OSHA"), alleging that he
lied in that complaint about precisely how his on-the-job
accident happened, based on a purported discrepancy between
the complaint and his prior story. An Administrative Law
Judge ("ALJ") later found that those charges of
dishonesty constituted unlawful retaliation against the
employee for filing the OSHA complaint.

We
agree with the Department of Labor's Administrative
Review Board ("ARB") that substantial evidence
supported the ALJ's rejection of the railroad's
affirmative defense and the ALJ's decision to impose
punitive damages. The amount of the punitive damages award
presents a closer question. The award seems high, and we
might ourselves have chosen a different sum. In the end,
however, we conclude that the ALJ's decision to award
punitive damages of $250, 000, to punish and deter what he
perceived to be a culture of intimidating employees and
discouraging them from engaging in protected activity, was
within the realm of his discretion. We deny the petition for
review.

I.

A.
The FRSA and Raye's Injury

This
story begins with an on-the-job accident in which Jason Raye,
a train conductor for a subsidiary of petitioner Pan Am
Railways, Inc. ("Pan Am"), injured his ankle and
missed work as a result. The FRSA's employee protection
provision forbids railroad carriers from retaliating against
employees who engage in protected activity, such as reporting
a workplace injury or filing an OSHA complaint. See
49 U.S.C. § 20109. Importantly, this case concerns FRSA
retaliation against Raye for filing an OSHA complaint.

A few
weeks before his accident, on October 5, 2011, Raye noticed a
pile of old railroad ties next to a track in a railyard in
Waterville, Maine. He thought the pile a tripping hazard and
reported it to his manager, Dwynn Williams. The pile was not
removed before Raye's accident.[1]

On
October 24, 2011, during his shift, Raye stepped off a train
onto that same pile of railroad ties and badly sprained his
ankle. We recount later his testimony about the accident.
Raye called his dispatcher for a ride to the hospital, where
Raye was diagnosed with the sprain. Williams visited Raye at
the hospital, and Raye explained that he had "rolled
[his] ankle on the same ties that [he had] turned in three
weeks ago." In response, Williams said that Raye should
"probably expect a [disciplinary] hearing" in the
wake of the injury.

Raye
had two scheduled days off after his injury, but he needed
three days to recover, so he missed a day of work. That
missed day required Pan Am to report Raye's injury and
the injury's cause to the Federal Railroad Administration
("FRA"). See 49 C.F.R. §
225.19(d)(3)(i). When Raye returned to work on October 28,
2011, his superintendent, Jim Quinn, learned about the injury
and the missed day. Quinn told Raye that the missed day
"change[d] everything" and that "[t]here
w[ould] probably be a hearing . . . for that FRA reportable
injury, for missing a day."

On
November 1, 2011, Raye received a Notice of Hearing from Pan
Am, signed by Williams. The notice alleged that Raye had
violated Pan Am Safety Rule P-76, which provides that
"[b]efore getting on and off [a train], [employees must]
carefully observe ground condition and be assured of firm
footing." At the November 11, 2011 hearing, Raye
testified that he had stepped down from the train safely and
cautiously, but had nonetheless lost his balance on the
unstable pile of ties. Raye also testified that after rolling
his ankle he had "caught [him]self" and sat down on
the ground rather than falling over.

On
November 28, 2011, John Schultz, Pan Am's Vice President
of Transportation, sent Raye a letter stating that Raye had
failed to assure himself of firm footing before stepping onto
the pile of ties. The letter itself "serve[d] as
discipline in the form of a formal [r]eprimand and . . . a
copy of it w[as] . . . placed in [Raye's] personal
file."

Raye
retained a lawyer, who drafted and submitted a typed
complaint to OSHA on December 6, 2011, without Raye first
reviewing or signing it. This initial complaint accused Pan
Am of violating the FRSA by retaliating against Raye, both
for reporting a safety hazard and for reporting his injury.
See 49 U.S.C. § 20109(a)(4), (b)(1)(A). The
typed OSHA complaint was consistent with Raye's testimony
at the earlier Pan Am disciplinary hearing, with one
exception: the complaint stated that Raye "fell hard to
the ground" at the time of the injury, rather than that
he sat down on the ground.

On
December 12, 2011, OSHA sent Pan Am a copy of Raye's
complaint and sought Pan Am's response to the
allegations. At the request of Pan Am's legal and human
resources departments, Schultz reviewed the OSHA complaint --
which he reasonably believed had been drafted by Raye himself
-- and thought there was a "major discrepancy"
between the complaint's statement about Raye falling hard
to the ground and Raye's prior hearing testimony that he
had caught himself and sat down on the ground after
stumbling. That discrepancy, Schultz said later, caused Pan
Am to make a "collective determination" to bring a
second set of disciplinary charges against Raye. Pan Am made
that determination without any effort to first ask Raye about
the purported inconsistency.

On
December 23, 2011, Pan Am sent Raye a second Notice of
Hearing, which directed him to appear at a second
disciplinary proceeding, levied several serious charges
against him, and threatened him with termination. OSHA and
the ALJ would later find that retaliation against Raye for
filing the initial OSHA complaint was a contributing factor
in Pan Am's decision to bring these new charges. The
notice alleged that Raye had "[p]rovid[ed] false
statements to [Pan Am] and/or a government agency, in
connection with [his] description as to how the incident . .
. on October 24, 2011, took place." That purported
dishonesty, the notice further alleged, violated two Pan Am
Safety Rules: (1) Rule PGR-C, which threatens employees with
dismissal if they commit "act[s] of insubordination,
hostility, or willful disregard of [Pan Am's]
interests" or if they "conduct themselves in such a
manner that [Pan Am] will . . . be subject to criticism or
loss of good will"; and (2) Rule PGR-L, which threatens
employees with dismissal if they are "dishonest,
immoral, vicious, ...

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